PERTH, Australia—As Australia moves towards epoch-making territory on the cusp of becoming the world’s largest LNG exporter, Deloitte Australia Oil and Gas Leader Bernadette Cullinane warned that the Lucky Country was positioned at two minutes to midnight and this could be viewed from two different perspectives by the industry.

Deloitte Australia Oil and Gas Leader Bernadette Cullinane

Speaking at the opening of the Australian Oil and Gas (AOG) Conference in Perth, Cullinane said the timeline “could either be interpreted as a countdown to the new era, a new horizon or a new dawn, much like the ball in Times Square. Or it could represent the doomsday clock, which was recently updated to two minutes to midnight heralding the world moving closer to global danger. It really is our choice what this clock represents.”

Australia’s largest oil and gas extravaganza opened on the banks of the Swan River with the country in the final stages of bringing the last of eight new LNG plants into production this year as Shell’s Prelude FLNG facility, Ichthys and Wheatstone are set deliver first gas cargoes that will carry Australia past Qatar into pole position as the world’s No.1 exporter of LNG.

In spite of this, AOG has visibly shrunk from the peak boom years of 2012-2013, when the conference occupied five sectors of the Perth Convention Centre, to three this year, albeit drawing 300 exhibitors from 25 countries and 150 speakers in 2017.

Nevertheless, there is an air of cautious optimism at AOG, which Cullinane said, “I believe the future is bright, bright for Australia, bright for the oil and gas industry and it is certainly bright for LNG. After the $250 billion of investment, we have the world’s best set of new [LNG] assets. And I believe it is now time to thrive to secure our place as not only the world’s largest LNG exporter, but also the most economic and reliable supplier.”

Cullinane’s comments came as Woodside, Australia’s largest oil and gas independent, posted record profits for 2016 of US$686 million, paying an increased dividend of 49 cents per share for the second half of the year. On the eve of the conference, Shell launched its first LNG Outlook which Cullinane referenced in forecasted growth of 50% in LNG exports to 2020 and annual gas growth of 4% to 5% with countries such as Colombia, Jamaica, Egypt and Pakistan becoming gas importers.

She said the industry was seeing the death of the oil and gas integrated business model as companies shifted toward “the era of gas, as the era of integration of gas and renewables is here”.

“Much of that growth in gas supply is coming from Australia and we can shine on the world stage, if we are ready to take on the challenge of the multi-decade operations and maintenance phase, which will result in an additional $250 billion dollars’ worth of investment over the next 25 years— discounting or excluding any new greenfield projects,” Cullinane said.

She cautioned, however, that in its hour of truth, Australia’s oil and gas sector faced multiple challenges fulfilling its potential punctuated by vast geography, economy of scale, remoteness of operation, proposed regulatory and tax changes, high capital and operating costs and an industrial relations framework rated among the most burdensome in the world by, among others, the World Economic Forum.

“It is imperative for Australia’s oil and gas industry to collaborate at this time entering the production and maintenance phase. While safety is uppermost and can never be compromised, the reliability of our projects is still in question … still to be demonstrated as they were not only behind schedule, but also taking longer than expected to get up to production volumes.”

“Despite these challenges, I believe now is the time to thrive in Australia. It’s time to flick the switch to growth or risk the decline or potential shutting down of our new assets. It is time to secure our place as the world’s best, most economic and reliable supply of LNG to a thirsty world. But to do this we need to leverage technology and innovation to leapfrog the competition. We need to collaborate and innovate like no other country to make Australia competitive and in order to do this we need to be willing to share information to do things differently,” she said.